(1) Recent signs of market recovery,
Filecoin (FIL) is showing signs of market recovery. From a monthly perspective, its bottom consolidation period has been quite long. As the saying goes, 'the longer the horizontal, the higher the vertical'; after experiencing a two-year bear market with a main decline and consolidation, the accumulation of main funds and retail trading has been relatively sufficient. As of the time of editing, the FIL price reached $6.26, with an increase of over 11%. The first target is expected to challenge the previous high from March this year and even approach $15. In the last bull market, FIL created a strong flywheel effect due to its unique mechanism, pushing its total market value to $500 billion. Although the same mechanism also caused it to severely overshoot in the bear market, this also indicates that it may explode again in the bull market.
(2) Future potential analysis Global market appeal:
Filecoin was once an absolute king project in the entire market, strongly supported by all exchanges including Binance, with its highest market value stage FDV exceeding $500 billion, once surpassing the market value of Ethereum at that time. Its foundational global market appeal is strong, and traditional compliant funds in the U.S. can enter through exchanges like Coinbase, which lays a solid foundation for its future development. Leading position in the Depin track: The Depin concept was born from Filecoin, and years later, Filecoin remains the leader in this track and concept, occupying an important position in related investment fields. As long as Depin concept speculation is involved, Filecoin is hard to overlook. Grayscale holdings and global consensus: Observing Grayscale holdings reveals that traditional U.S. funds are closely watching its holding targets. Among the dozen or so targets in Grayscale's holdings, besides BTC, ETH, and Sol, Filecoin has a high level of global consensus. This means it is highly regarded in the international investment market and is expected to attract more funds.
(2) The unique mechanism of Filecoin and the automatic Fomo model (1) Built-in node lock-up Fomo mechanism Filecoin has a unique built-in node lock-up Fomo mechanism. Under this mechanism, when the coin price rises, although the coin-denominated returns may remain unchanged or even decrease due to increased computing power, the gold-denominated yield from the node's staked lock-up will increase rapidly. This feature will attract a large amount of traditional funds to purchase FIL for staking mining to obtain gold-denominated returns. For example, in the last bull market, FIL peaked at $238, with FDV exceeding $500 billion, and a large amount of off-market funds poured in. If FIL can stabilize at $20 again in this bull market, this automatic Fomo mechanism is expected to gradually manifest and self-reinforce, driving its price further up.
(2) Advantages brought by F3 technology improvements The application of F3 technology has significantly enhanced the Filecoin network. It has reduced the final determinism time from about 7.5 hours (900 epochs) to just a few minutes (about 2 epochs), achieving a speed increase of 450 times. This greatly accelerates the transaction confirmation speed on the network, significantly enhancing user experience and making the Filecoin network more compatible with applications that require high transaction confirmation speeds, laying a technical foundation for its expansion into more application scenarios.
3. Practical issues and challenges facing Filecoin
(1) Demand for token model adjustments
Filecoin needs to explore a better token model. Currently, the accumulation method of network inflation (block rewards) across different types of SLAs (Service Level Agreements) needs improvement. For instance, archival storage SLA is currently subsidized by block rewards, but to reduce the costs of other SLAs, the network needs to adjust the inflation model to achieve a more reasonable resource allocation and cost control, ensuring the network's sustainable development.
(2) Self-trading prevention challenges
Self-trading issues are a major challenge facing Filecoin. In the DePIN network, every subsidizing network needs to solve this problem. Malicious node operators may self-pay service fees, provide low-quality services, and steal block rewards, thereby harming the fairness and effectiveness of the network. Therefore, Filecoin needs to establish more effective mechanisms to prevent self-trading behaviors and maintain the healthy ecology of the network.
(3) Issues with on-chain transfer of storage transactions Currently,
Many storage transactions of Filecoin are conducted off-chain in fiat currency, leading to trust issues regarding the payment storage amounts to storage providers. Moving these transactions on-chain not only allows external parties to verify their economic value but also enables the construction of new primitives that leverage on-chain cash flows to provide more authentic services. This helps enhance Filecoin's credibility and competitiveness in the market.
(4) Optimization of storage provider configuration The 'default' configuration of Filecoin storage providers needs further optimization. Currently, only technically skilled and financially strong storage providers can easily sell storage services. To enable more storage providers to participate and contribute different SLAs, the network needs to provide a more convenient and frictionless configuration method or build a better, more modular 'sidecar' system to meet one-time SLA demands, thereby promoting the prosperous development of the storage service market.
Filecoin demonstrates considerable potential in market performance, mechanism advantages, and technological innovation, but also faces a series of practical issues and challenges. In the development process of the cryptocurrency market, how Filecoin responds to these challenges and achieves sustainable development is worth our continuous attention.